Franklin Crypto Index ETF Expands Investment Focus
The Franklin Crypto Index ETF is set to broaden its investment horizon by transitioning from a primary focus on Bitcoin and Ethereum to a more diverse selection of cryptocurrencies. This update, submitted to the U.S. Securities and Exchange Commission (SEC) on November 24, signals a response to increasing investor interest in a more comprehensive array of digital assets.
New Portfolio Alignment
Starting December 1, 2025, the ETF will align its portfolio with the expanded CF Institutional Digital Asset Index – US–Settlement Price (also known as the Underlying Index), managed by CF Benchmarks Ltd. This index will not only include Bitcoin and Ethereum but will also incorporate additional cryptocurrencies such as XRP, Solana, Dogecoin, Cardano, Stellar Lumens, and Chainlink in proportions that reflect their representation within the Underlying Index.
Regulatory Changes and Market Impact
This adjustment comes in light of the new regulations set forth by Cboe BZX Exchange Inc. and sanctioned by the SEC under their generic listing standards, which now allow the fund to diversify its holdings beyond the initial two cryptocurrencies. According to the filing, the Underlying Index will continue to undergo quarterly rebalancing, which may result in changes to its components over time, in accordance with the Index Provider’s rules.
Enhancing Liquidity and Market Representation
Moreover, the introduction of these new assets is expected to enhance liquidity and minimize transactional barriers, particularly through a structural change that allows authorized participants to engage in in-kind creations and redemptions. Advocates of this broader asset mix argue that it not only enhances market representation but also mitigates the dependency on Bitcoin and Ethereum, which have traditionally dominated the cryptocurrency space.
This move signifies a pivotal shift within the ETF, catering to an evolving market landscape and the growing demand for diverse digital asset exposure.
